Recently, an audit (CIN: A-01-99-01502), conducted by the Office of the Inspector General (OIG), found that a tribe did not make the pre-requisite finding, required by Section
813 of the Indian Health Care Improvement Act, for extending eligibility to individuals not otherwise eligible for Indian Health Service (IHS) services. The OIG audit found that a tribe, had extended eligibility for its Indian Self-Determination Act (ISDA) contracted pharmacy program to a substantial number of the tribes employees who were not otherwise eligible for IHS services. Specifically, the OIG concluded that the tribe lacked authority to purchase and use Federal discount drugs for such individuals. Tribal contractors and compactors may not dispense drugs purchased through Federal discount programs to non-Indian employees of the tribe, and tribes may not purchase drugs under such programs
for resale to non-IHS beneficiaries.
Please review all ISDA contracts, compacts, and funding agreements (FA) within your respective Area, and identify those agreements that contain language extending pharmacy benefits inappropriately
to non-IHS beneficiaries. There are circumstances, particularly in rural areas, where there is
no reasonable alternative health facility and where the provision of health services to non-IHS beneficiaries will not result
in a diminution of services to eligible beneficiaries. However, in most areas, there are
reasonable alternative health facilities. Absent a joint determination by
IHS and the tribe, meeting the two statutory criteria in Section 813, the tribe may be operating outside the scope of its ISDA contract or compact if the tribe provides pharmacy services
to non-IHS beneficiaries. In such a case, the tribe must be cautioned that it may be exposed
to legal and financial ramifications. If the joint determination has not been made, or if
it cannot be made, please negotiate with the tribe to remove the unauthorized language from the contract, compact, or FA.
Please consult with your respective regional Office of General Counsel attorney
for assistance in negotiating the changes to the contracts, compacts, or FAs that are
not in compliance with the related Federal statutes.
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